Automakers Expect 2012 Gains After December Gains

Strong December auto sales are leading forecasters to make optimistic 2012 projections.

December light-vehicle sales are expected to rise 8% from a year earlier to 1.2 million vehicles, the highest total since March, according to Edmunds, J.D. Power TrueCar.com. Automakers will report December and full-year results on January 4th.

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For the full year 2011, light-vehicle sales are expected to total 12.8 million units, the highest level since 2008, according to Edmunds and TrueCar. For 2012, Edmunds projects sales of 13.6 million vehicles, while TrueCar and LMC Automotive project 13.8 million.

"December's sales rate was a continuation of the rather slow and steady recovery that now symbolizes 2011," said TrueCar analyst Jesse Toprak, in a prepared statement. "This year was absent of a blockbuster sales month but we see this pace of growth as healthy and sustainable in the coming year where the industry is going to sell nearly 14 million units based on the merits of its products and improved economy."

LMC Automotive analyst Jeff Schuster said light-vehicle sales are strong at year-end for the third straight year.

"Next year, the automotive industry will look to build upon the strong finish to 2011, but the real test in 2012 will be weathering a summer selling slowdown and posting a full year of a progressive recovery," Schuster said, in a prepared statement.

In December, Hyundai/Kia is expected to lead the top seven automakers with a 34% increase, with industry sales growth of 8%, TrueCar said. The firm expects 34% growth at Chrysler, 7% growth at Ford (F) and 4% growth at General Motors (GM), as well as declines of 16% at Honda (HMC) and 2% at Toyota (TM).

The sales gains have occurred despite a 3% decline in incentives to an average of $2,562, TrueCar said. Chrysler average incentives declined 14%, GM incentives declined 6% and Ford incentives declined 1%, the firm said.

Chrysler's market share is expected to increase 2.4 points over December 2010, said Edmunds, which noted that the gains are driven by a 51% gain at Dodge, compared with the same month a year earlier. Meanwhile, GM is expected to show a 31% increase over November, Edmunds said.